GRI's Boost Sector, Credit Suisse rates Neptune Orient Lines Outperform

[LEFT]0523 GMT 4 April [Dow Jones] STOCK CALL: Asian shipping-liners are undervalued after recent general rate increases across all significant trade lanes, Credit Suisse says, adding players’ willingness to support rate restoration alleviates concerns they would revert to undercutting each other on price. The house estimates if liners achieve only an 80% success rate with announced but not-yet-implemented rate increases and rates flatlined until end-year, it would still be equivalent to a 126% annual average increase for Asia-Europe routes and 50% for trans-Pacific for 2012. It says rates would then be higher than 2010’s sector-valuation peak at 1.6X P/B, setting the scene for a continued sector re-rating to considerably higher than the current 1X P/B; it views 1.4X as increasingly justified as a sector target value. It says consensus earnings estimates generally undercook the segment’s prospects and stock prices are failing to represent appropriate value.It keeps an Overweight call on the sector, tipping NOL (N03.SG) as a preferred pick, rating it Outperform with S$1.85 target. The stock is up 1.8% at S$1.435.

[I]- Leslie Shaffer, Dow Jones Newswires [/I][/LEFT]